19 Jul Deloitte Finds More BTS Shoppers Decide To Purchase In-Store Than Online
With 19 million college students heading off to colleges and universities in the coming weeks, retailers can expect parents to spend $25.5 billion to get their students settled in, according to Deloitte’s “2018 Back-to-College Survey” of parents.
This year’s survey results show that mobile and online shopping are hitting a plateau amongst parents. Down from the 80 percent of total shoppers in 2017, only 69 percent of parents surveyed plan to use a desktop or laptop this season. While nearly the same amount as last year (45 percent) choose to use mobile devices, fewer parents (13 percent) plan to use social media this year than in 2017 (18 percent). Of those who plan to use these digital platforms, the top uses are looking up pricing information and discounts.
“This decline in digital usage for back-to-college shoppers could be a sign that consumers desire innovation with their digital shopping interactions,” said Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution leader. “It provides an opportunity for retailers to define innovation at the intersection of technology, engagement and decision making in the coming years.”
Additionally, in-store sales are expected to account for more than half (54 percent) of back-to-college sales with online to account for nearly one-quarter (24 percent) of sales, according to the survey. This means 22 percent of spend share has not yet been designated to in-store or online, leaving $5.6 billion up for grabs for retailers.
“The preference for in-store shopping amongst college parents surveyed is consistent across the 2018 back-to-school and back-to-college seasons. Where shoppers were once undecided, they’ve now selected to shop in-store instead of online when faced with the choice,” Sides added. “Even with in-store shopping gaining prominence, there’s still $5.6 billion of undesignated spend that’s fair game to all retailers. Interestingly, for low-income household respondents, 31 percent of back-to-college spend is undecided between in-store and online; these shoppers are more likely to search for deals and extend their shopping season.”
Shoppers’ income levels are a notable influence for purchasing and decision making this season. Low-income households are the most deal-focused, as three in four parents surveyed (75 percent) plan to shop at different points throughout the summer to take advantage of deals compared to high-income household shoppers (63 percent).
Survey results showed the most disparity amongst income levels when parents were asked where they will shop and what they will buy. For instance, mass merchant retailers are the top shopping destinations amongst all income levels, drawing in 75 percent of shoppers. However, low-income households prefer dollar stores (32 percent) and off-campus bookstores (27 percent) while high-income households prefer traditional department stores (27 percent) and warehouse membership clubs (26 percent).
This year, more than four out of five parents (82 percent) surveyed intend to collaborate with their college students for budgeting and shopping, providing opportunity for retailers to consider tailoring promotional messages to both groups. Yet, household income levels are a driving factor in determining whether it is the student or the parent who opens the wallet at the register. According to parents surveyed, high-income households expect their students to be twice as likely to use the family credit card (42 percent) than low-income households (19 percent). Thirty-nine percent of low-income households expect students to fund their own purchases compared to 37 percent of middle-income and 30 percent of high-income households.
Retailers can expect back-to-college busy season to peak between the last two weeks of July and the first two weeks of August as 80 percent of all back-to-college shoppers expect to be active in this period, spending $14 billion (50 percent of total spend) according to the back-to-college survey and the U.S. Census Bureau’s current population survey. All product categories are likely to experience peak sales in early August except for computers and hardware, which will peak in late July. Additionally, all shopping destinations should expect peak back-to-college shopping in early August except home electronics stores, home furnishings stores and warehouse clubs.
“We found planned shopping patterns by store destination to be incredibly telling,” said Bobby Stephens, senior manager, Deloitte Consulting LLP. “It gives retailers insight into when, where and how consumers plan to engage and spend. Retailers with this understanding can be much more targeted and intentional in promotions and offerings.”
“According to parents surveyed, 68 percent plan to start their back-to-college shopping before August. Even more pertinent to retailers, these early shoppers also plan to spend 35 percent more than shoppers who wait until August,” said Lokesh Ohri, principal, Deloitte Consulting LLP and leader of customer engagement, content and commerce offerings in the retail practice. “This is an opportunity for retailers to engage customers early and often, to not only capture the pockets of early spenders but also appear on the radar of those shoppers who plan to engage throughout the season.”